Steven Chen

Cofounder and former CTO of YouTube

• Born: August 1, 1978
• Place of Birth: Taipei, Taiwan

Primary Company/Organization: YouTube

Introduction

Steven Chen, a former PayPal employee, cofounded YouTube with his partners Chad Hurley and Jawed Karim in 2005. Since its inception, YouTube became the most popular video-sharing site on the Internet and the second most popular website in the world, behind only Google as of 2023. In 2006, Chen sold YouTube to Google and went on to cofound AVOS Systems, which ran the popular bookmarking site Delicious.com (formerly del.icio.us) until 2014.

Early Life

Born in Taipei, Taiwan, in August 1978, Steven Chen immigrated to the United States with his parents when he was fifteen years old. The Chen family settled in suburban Chicago, Illinois, and Steven finished his secondary education at both John Hersey High School in Arlington Heights and the Illinois Mathematics and Science Academy. He was a talented student who earned money after school working at a local 7-11 store. After graduation, he attended college at the University of Illinois at Urbana-Champaign, where he studied computer science until his classmate, PayPal cofounder Max Levchin, offered him a job at the fledgling e-payment site.

Life's Work

Chen worked at PayPal as a software developer from 1999 until 2005. At PayPal, Chen served primarily as a computer programmer and had a reputation for delivering code quickly, though usually by taking unorthodox shortcuts, which, while effective, caused confusion among his peers. For the last two years of his career at PayPal, Chen worked to launch PayPal in China, and eventually left the company in 2005.

In 2005, Chen, along with partners Chad Hurley and Jawed Karim, started YouTube.com with an $11.5 million venture capital grant from Sequoia Capital. The popular and often repeated version of the website's conception begins with a dinner party in Chen's San Francisco apartment (though Chen has stated that the popular story is probably a slightly romantic and marketable exaggeration). The guests took a number of videos at the event but had no easy way to share them in the same way that people were able to share photographs through sites such as Myspace and Flickr.

This discussion led to an exploration of video-sharing and hosting technologies. Ultimately, the trio decided that Adobe Flash was the optimal file format and that the site would be coded in HTM15. While designing and coding the site, Chen briefly worked at the then-fledgling Facebook as a senior software engineer, but he left within a few months to pursue YouTube full time. YouTube operated as an open beta beginning in April 2005 and formally launched in November of 2005. Initially, Chen and his cofounders paid for the venture with their own credit cards, but prior contacts at PayPal connected Chen and his partners with investors at Sequoia Capital, a prominent tech investing firm, which seeded the venture with $3.5 million to cover start-up costs.

The website was immediately popular. Users appreciated the extremely simple user interface, diverse content, and peer-review community. This popularity engendered another round of capital funding from Sequoia in April 2006, when the firm put up another $8 million.

For all its popularity, the website has struggled for profitability, in large because of the founders' resistance to intrusive advertising. Chen rejected so-called pre-roll advertising (advertisements that load in-window before the user can play a selected video) as intrusive and unwelcome; only reluctantly did he accede (in January 2006) to the introduction of any ads at all—and then only out of financial necessity.

Within one year, more than one million videos had been posted to YouTube, and sixty-five thousand were being uploaded every day. Although the site was undeniably successful as an Internet entity, this success led to numerous copyright issues, notably in February 2006, when users began uploading the popular but copyrighted Saturday Night Live digital short “Lazy Sunday.” This resulted in an informal take-down request from NBC (the company that produces Saturday Night Live), with which Chen and YouTube complied. YouTube does not prescreen content, but it does go beyond the requirements of the Digital Millennium Copyright Act compliance by stating in the site's upload instructions that users should not post pirated or otherwise copyright-infringing videos.

In October 2006, the Ohio machinery company Universal Tube and Rollform Equipment Corporation initiated a lawsuit against YouTube. The popularity of YouTube was causing unwelcome surplus traffic to Universal's website, the similarly named utube.com. The conflict was settled in 2007, when Universal changed its domain to utubeonline.com and withdrew its opposition with the U.S. Patent and Trademark Office.

Chen and cofounder Hurley sold YouTube to Google for $1.65 billion, making Chen a multimillionaire virtually overnight. Chen was also employed by Google as chief technology officer (CTO) of the site he created, which allowed him to maintain some control over the direction and technology of the site as it evolved.

After Google's purchase of YouTube, copyright liability became a pressing concern for the now consolidated company. Numerous copyright infringement lawsuits were filed by major media production companies, including Lions Gate Entertainment and Viacom, resulting in YouTube's being compelled to limit user-uploaded videos to those with a duration of no more than ten minutes; this limit was later relaxed to fifteen minutes. Chen oversaw this implementation and contributed to the creation of several marketing and publication partnerships with large media firms that began uploading copyrighted content on approved terms. He stayed on as CTO of YouTube until 2008 but continued to work with Google until 2009 in various capacities.

Chen founded a new company with Hurley, AVOS Systems, in 2011. He also purchased Tap 11, a social analytics company in May 2011. One month later, Chen's AVOS purchased the long-running bookmarking site Delicious (formerly del.icio.us) from search engine provider Yahoo!. Delicious had been floundering under Yahoo, losing visitors and struggling to find a purpose. Chen expressed an interest in the site's potential, which led to the buyout.

Chen helmed AVOS Systems for several years and attempted unsuccessfully to revitalize Delicious. In 2011 AVOS launched MeiWei.fm, a Chinese-language sister site to Delicious, which allows East Asian users to bookmark and share content. The company also launched Zeen.com, a short-lived online magazine production site.

In April 2012, Chen and AVOS secured Series A funding from a number of investors and venture capitalists, including Innovation Works, Madrone Capital, and Google Ventures (which Chen helped to found). Chen maintained an office at AVOS's U.S. headquarters in San Mateo, California, although the company also had offices in Dunedin, New Zealand, and Beijing, China. Chen described AVOS as a development laboratory, a space in which he and Hurley could freely explore new projects and possibilities.

By May 2014 AVOS sold Delicious to Science Inc. and changed direction to focus solely on its mobile video app MixBit, under Hurley's leadership. Chen left for Google Ventures, where he became its entrepreneur in residence, and that September he joined Nom Labs Inc. as its CTO. He remained at Google until 2018. A year later, he returned to Taiwan where he continued to develop tech start-up projects into the 2020s.

Personal Life

Chen has received numerous nominations and honors: He was named one of Business 2.0's 50 Most Influential People one of GQ magazine's men of the year in 2006, as well as one of Fortune magazine's most powerful people in business.

Bibliography

AVOS Systems. “Home Page.” 2011. Web. 1 Aug. 2012.

Cloud, John. “The YouTube Gurus.” Time 25 Dec. 2006: n. pag. Web. 30 July 2012.

Grossman, Lev. “The People's Network.” Time International (Canada edition): n. pag. 13 Nov. 2006: 42–45. Print. 31 July 2012.

Levy, Steven. “Now on GooTube: The Price Is Right.” Newsweek 23 Oct. 2006. Print.

Miles, Beckett. “Chad Hurley and Steven Chen.” Time International (Canada edition) 14 May 2007: 86. Print. 31 July 2012.

Smalera, Paul. “YouTube Cofounder Quits CTO Post: No One Notices.” BusinessInsider.com 30 June 2009: n. pag. Web. 1 Aug. 2012.

“Steve Chen and Chad Hurley.” Encyclopedia of World Biographies. Advameg, Inc. Web. 31 July 2012.

Tanaka, Akito. "YouTube Co-founder Steve Chen Bets On Taiwan for Next Startup." Nikkei Asia, 21 May 2021, asia.nikkei.com/Editor-s-Picks/Interview/YouTube-co-founder-Steve-Chen-bets-on-Taiwan-for-next-startup. Accessed 8 Mar. 2024.

“YouTube Co-founder Steve Chen Leaves Company but Remains with Google.” International Business Times.com 30 June 2009: n. pag. Web. 30 July 2012.

“YouTube's Chad Hurley and Steven Chen Bookmark Delicious.” Forbes 27 Apr. 2011: 65. Print.